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YEMEN-CONFLICT-ECONOMY-RATE-PRICES
Yemen central bank raises interest rates to shore up riyal
ADEN, Sept 19, 2018 (BSS/AFP) – The central bank of war-torn Yemen has raised
interest rates on deposits to an all-time high of 27 percent in a bid to
stabilise the plunging riyal that caused food prices to soar.
The bank also raised interest rates on government bonds to 17 percent from
12 percent and banned taking out of Yemen more than $10,000 without a prior
permit, the official Saba news agency reported.
Previously the interest rate on deposits was 17 percent, according to the
Facebook account of the central bank run by the internationally recognised
government.
The move is aimed at strengthening the riyal and reducing skyrocketing
inflation.
Since the start of a Saudi-led military campaign against Iran-backed Huthi
rebels who control the capital in March 2015, the riyal has lost more than
two-thirds of its value.
The Yemeni currency has dived more than 36 percent since the beginning of
the year despite Saudi Arabia placing a $2 billion deposit in the central
bank, now based in the government’s temporary capital of Aden.
The slide in the value of the currency has triggered a sharp rise in the
prices of commodities, especially food and fuel.
Yemen’s government in January issued its first budget in three years,
projecting a $1.3 billion deficit.
The high cost of living sparked widespread protests in South Yemen in early
September which were met by the government raising salaries by 30 percent.
The UN Office for the Coordination of Humanitarian Affairs said on Monday
that currency depreciation is likely to make another 3.5 million people food
insecure, in addition to 8.4 million people who need emergency food
assistance.
The charity Save the Children warned Wednesday that more than five million
children are at risk of famine in Yemen.
BSS/AFP/SR/2010 HRS